Becoming a Certified Financial Planner

Financial Advisors

Becoming a Certified Financial Planner

A financial adviser or financial planner is a professional that offers financial advisory services to customers according to their financial status. In most countries, financial advisers are required to complete certain professional training and obtain certification with a governing regulatory body in order to offer financial advice. They may also be required to take a licensing examination in their state or province to be able to practice as a financial adviser. Some states do not require licensing or registration but may require a business plan, market analysis or other performance review or examinations.

The first step that prospective financial advisors take before becoming a financial advisor or financial planner is to gain the relevant education or training. This can often be achieved by completing a formal education at an university or college followed by on-the-job training or experience. Many financial professionals choose to further their education after obtaining a degree, either studying at university or through a program of short term study at a community college or trade school. Many financial professionals also choose to go further and attain an MBA, furthering their professional qualifications.

After obtaining education and qualifications, financial advisors are required to undergo a series of examinations to prove their worth to the licensing bodies and the public. The exams measure a wide range of skills including communication skills, written and oral communication, financial planning, budgeting, business judgment, risk management and ethics. Candidates wishing to become financial advisors need to be highly skilled in these areas in order to become licensed or register with the regulatory bodies in their state or province. Aspiring planners should also be able to demonstrate their ability to successfully represent their clients in negotiations, provide effective leadership and manage interpersonal relationships.

Another important factor that distinguishes a good financial advisor from a bad one is their suitability or fit. This is primarily measured by the professional’s knowledge of financial affairs and the specific responsibilities they have to their clients. According to the American Bar Association (ABA), a standard of suitability is defined as “the ability to perform the basic functions of the lawyer: assisting the client in decision-making, providing legal advice and representing the client in court.” The Bar Association also suggests that the standard be considered a high level of competence. The American College of Financial Planning (ACFF) defines suitability as “a combination of certain characteristics that a qualified professional should possess to perform the duties of a financial advisor under the supervision of a qualified attorney” and the role of a certified financial planners as being that a professional should meet the minimum qualifications of the American Bar Association’s (ABA’s) standards of suitability.

In order for financial advisors to meet these requirements, they are required to take and pass the Certified Financial Planning (CFP) examination. Candidates will need to be aware of the different tests in order to pass it. These include both the theory and practical portions of the exam, which includes both general and case study applications. Candidates who successfully complete the exam and are not licensed will be required to take the necessary continuing education courses in order to maintain their license. These classes allow financial planners to continue educating themselves on changing business and consumer laws.

In order to become a Certified Financial Planner, a candidate must also pass the estate planning and asset protection portion of the CFP exam. Because financial advisors work with many different types of clients, they need to be knowledgeable in tax planning, retirement planning, trust planning and asset protection. They also need to be familiar with all of the different state and federal laws regarding these various subjects. In order to be a CFP, a candidate must pass the exam with a score of at least 6 javelin.